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Philadelphia Fed December Outlook contines decline
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Conditions in the region's manufacturing sector continued to deteriorate this month, according to firms polled for the December Business Outlook Survey. All of the survey's broad indicators remained negative this month and at relatively low levels. Firms reported declines in input prices and the prices for their own manufactured goods this month. Consistent with the weakness in current activity, most of the survey's indicators of future activity slid further into negative territory, suggesting that the region's manufacturing executives expect continued declines over the next six months.
Indicators Show Continued Declines
The survey's broadest measure of manufacturing conditions, the diffusion index of current activity, improved from -39.3 in November to -32.9 this month. The index, which fell a dramatic 41 points in October, has remained near its current low reading for the past three months (see Chart). Evidence of continued weakness was also seen in the other broad indicators. The survey's new orders index remained at a low negative reading, although it increased six points, to -25.2.
The survey's shipments index declined almost 10 points, to its lowest reading since February 2001. Indexes for unfilled orders and delivery times remained significantly negative this month and edged slightly lower. The current employment index fell for the third consecutive month, decreasing four points, to its lowest reading since September 1982. The percentage of firms reporting a decrease in employment (42 percent) was greater than the percentage reporting an increase (13 percent). The average workweek index fell notably, declining 12 points.
Posted: December 18, 2008 Thursday 10:02 AM